RNS Number:5389F
Wynnstay Properties PLC
23 November 2004
23 NOVEMBER 2004
Wynnstay Properties PLC
Interim Results for the six months ended 29 September 2004
Chairman's Statement
I am pleased to report interim results which reflect further significant
progress by your Company and, accordingly, the Board has again declared an
increase in the interim dividend.
The results may be summarised as follows:-
2004 2003
- Profit on Ordinary Activities before taxation: - 1.2% #318,000 #322,000
- Profit after taxation: - 0.9% #223,000 #225,000
- Interim dividend per share: + 4.5% 2.3p 2.2p
- Net asset value per share: + 11.3% 336p 302p
The portfolio remained fully let and income producing throughout the period with
the exception of a short void at one property. Rental income rose to #828,000
(2003: #748,000), despite the disposal of our property in Sheffield in March
2004, reflecting the inclusion of the Oakcroft Business Centre at Chessington
acquired in November 2003, together with the benefit of rent reviews on a number
of properties within the portfolio. As a result we expect satisfactory growth
in rental income for the full year.
The increase in property outgoings reflects a provision for repairs at one
property which will become vacant shortly. Net finance costs rose to #207,000
(2003: #171,000) reflecting increased average borrowings as a result of the
recent additions to the portfolio and higher interest rates compared with the
same period last year.
Retained profits of #150,000 resulted in net asset value increasing to 336p per
share compared with 302p per share at the same time last year. In accordance
with our normal practice, the portfolio has not been revalued at the half-year
stage but a full revaluation will be carried out at 25th March 2005.
There have been two significant developments in the portfolio since I last
reported to shareholders in the summer.
Firstly, on 16th August 2004, we announced the purchase of a self-contained
industrial investment at Basingstoke for a cash consideration of #1.5 million.
This freehold property comprises three adjoining industrial/warehouse units,
totalling 22,495 square feet. It is fully let on leases expiring between
January 2005 and May 2011, currently producing an income of #128,150 per annum,
equivalent to a yield of 8% per annum, after taking account of acquisition
costs.
This property is located approximately one mile from Basingstoke town centre and
is adjacent to Chineham Business Park, which has over 750,000 square feet of
high quality business space, occupied predominantly by blue chip and high-tech
companies. It is also well placed for convenient access to Basingstoke's other
industrial estates and to the A33 trunk road and the M3 motorway. The
acquisition, which was funded from our existing loan facilities, was completed
on 31st August 2004. We have subsequently agreed provisional terms for a 15
year lease with a new tenant for the unit which becomes vacant next January.
The Board believes this acquisition marks a further important stage in the
continuing enhancement of Wynnstay's portfolio.
Secondly, shortly after the end of the half-year, we announced that contracts
had been exchanged for the sale of our freehold office and retail property
interests in York Road, Bognor Regis, West Sussex for a cash consideration of
#1.475 million. This compares with their combined valuation of #1.025 million
at 25th March 2004, resulting in a surplus of #450,000 before costs and
taxation. Completion is scheduled to take place on 25th February 2005. This
transaction is not, therefore, reflected in the results now being reported, but
will be included in the full year's results to be announced in June 2005.
As a result of the increased borrowings relating to the Basingstoke acquisition,
net gearing rose to 71% (2003: 56%) but the Company's strong positive cash flow,
coupled with growth in net asset value over recent years, continue to provide us
with the opportunity to finance and make further selective acquisitions, where
we believe these will further enhance shareholder value in the medium to longer
term. We will also continue to keep under review opportunities to dispose of
properties in the portfolio where, as in the case of the Bognor Regis
properties, future growth in value or income appears limited and a significant
profit can be realised, thereby providing additional funds for new investments.
When I reported at this time last year, I noted that the interest rate cycle had
turned, with rates having started to rise from their 48 year historic lows.
Over the past year, the Bank of England's base rate has risen in five steps from
3.5% to 4.75% per annum. Some commentators continue to forecast one or two
further increases in interest rates possibly next month or early next year;
whilst others maintain that economic uncertainties make it more likely that the
next move may be downwards. However, more than half Wynnstay's borrowings are
at fixed rates, and we also fixed the rate of the variable portion of our loan
facilities until January next year. Thus, whichever forecast on interest rates
proves to be correct, any changes will not have a material impact on our results
for the full year.
In the light of these results, the Board has decided to increase the interim
dividend by 4.5% from 2.2p per share to 2.3p per share. This will be paid on
16th December 2004 to those shareholders on the register on 3rd December 2004.
The Alternative Investment Market, on which Wynnstay's shares are quoted,
continues to be very active, with a large number of new companies coming to the
market and greater interest by investors in smaller quoted companies. It is
pleasing to note that the Company's share price continues to reflect a narrower
discount to underlying net asset value than in the past and that more new
shareholders have been appearing on the register.
Philip G.H. Collins
Chairman
23 November 2004
UNAUDITED CONSOLIDATED PROFIT & LOSS ACCOUNT
FOR THE SIX MONTHS ENDED 29 SEPTEMBER 2004
Six months ended Year ended
29 September 25 March
2004 2003 2004
(Unaudited) (Audited)
#'000 #'000 #'000
Turnover
Gross Rental Income 828 748 1,555
Fees and Commissions 9 10 20
-------------- -------------- --------------
837 758 1,575
Property Outgoings (51) (31) (82)
-------------- -------------- --------------
786 727 1,493
Administration and Other Costs (261) (234) (474)
-------------- -------------- --------------
Operating Profit 525 493 1,019
Profit on Disposal of Investment Properties - - 81
-------------- -------------- --------------
525 493 1,100
Finance Costs (Net) (207) (171) (368)
-------------- -------------- --------------
Profit on Ordinary Activities
before Taxation 318 322 732
Taxation (95) (97) (198)
-------------- -------------- --------------
Profit on Ordinary Activities
after Taxation 223 225 534
Interim Dividend
2004: 2.3p per share, 2003: 2.2p per share (73) (69)
Total Dividend 2003-2004: 7.6p per share (240)
-------------- -------------- --------------
Profit Retained 150 156 294
-------------- -------------- --------------
Basic Earnings per share (see note below) 7.1p 7.1p 16.9p
Note
Basic earnings per share have been calculated on profits after taxation
attributable to ordinary shareholders of #223,000 (2003: #225,000) and on
3,155,267 ordinary shares, being the weighted average number in issue during
both periods.
UNAUDITED CONSOLIDATED BALANCE SHEET
AS AT 29 SEPTEMBER 2004
29 September 29 September 25 March
2004 2003 2004
(Unaudited) (Unaudited) (Audited)
#'000 #'000 #'000
Fixed Assets
Tangible Assets 19,037 15,514 17,470
Investments 1 1 1
--------------- --------------- ---------------
19,038 15,515 17,471
Current Assets
Debtors 81 86 60
Cash at Bank and in Hand 217 330 515
--------------- --------------- ---------------
298 416 575
Creditors: Amounts falling due
within one year (785) (613) (837)
--------------- --------------- ---------------
Net Current Liabilities (487) (197) (262)
--------------- --------------- ---------------
Total Assets Less Current Liabilities 18,551 15,318 17,209
Creditors: Amounts falling due after more
than one year (7,792) (5,700) (6,600)
--------------- --------------- ---------------
10,759 9,618 10,609
Provision for Liabilities and Charges (160) (86) (160)
--------------- --------------- ---------------
Net Assets 10,599 9,532 10,449
--------------- --------------- ---------------
Capital and Reserves
Share Capital 789 789 789
Capital Redemption Reserve 205 205 205
Share Premium Account 1,135 1,135 1,135
Capital Reserve 151 151 151
Revaluation Reserve 4,505 3,797 4,505
Distributable Reserves 3,814 3,455 3,664
--------------- --------------- ---------------
Equity Shareholders' Funds 10,599 9,532 10,449
--------------- --------------- ---------------
UNAUDITED CONSOLIDATED CASH FLOW STATEMENT
FOR THE SIX MONTHS ENDED 29 SEPTEMBER 2004
Six months ended Year ended
29 September 25 March
2004 2003 2004
(Unaudited) (Audited)
#'000 #'000 #'000
Cash Flow from Operating Activities (Note 1) 507 422 1,073
-------------- -------------- --------------
Returns on Investment and Servicing
of Finance
Interest Received 6 4 10
Interest Paid (209) (170) (306)
-------------- -------------- --------------
Net Cash (Outflow) from Returns on
Investment and Servicing of Finance (203) (166) (296)
-------------- -------------- --------------
Taxation Paid (54) (52) (118)
-------------- -------------- --------------
Capital Expenditure and Financial
Investment
Purchase of Tangible Fixed Assets (1,570) - (2,006)
Disposal of Tangible Fixed Assets - - 905
-------------- -------------- --------------
Net Cash (Outflow) from
Investing Activities (1,570) - (1,101)
-------------- -------------- --------------
Equity Dividends Paid (170) (161) (230)
-------------- -------------- --------------
Net Cash (Outflow)/Inflow before Financing (1,490) 43 (672)
Financing
Drawdown of Bank Loan 1,192 - 1,800
Repayment of Bank Loan - - (900)
-------------- -------------- --------------
(Decrease)/Increase in Cash in the Period (298) 43 228
-------------- -------------- --------------
Reconciliation of Net Cash Flow to
Movement in Net Debt
(Decrease)/Increase in Cash in the Period (298) 43 228
Cash (Outflow) from Debt Financing (1,192) - (900)
-------------- -------------- --------------
Movement in Net Debt in the Period (1,490) 43 (672)
Net Debt at 25 March 2004 (6,085) (5,413) (5,413)
-------------- -------------- --------------
Net Debt at 29 September 2004 (Note 2) (7,575) (5,370) (6,085)
-------------- -------------- --------------
Notes To Cash Flow Statement
1. Reconciliation of Operating Profit to Net Cash Inflow from Operating
Activities
Six Months ended Year ended
29 September 25 March
2004 2003 2004
#'000 #'000 #'000
Operating Profit 525 493 1,019
Depreciation and Amortisation 3 3 7
(Increase)/Decrease in Debtors (22) (16) 10
(Decrease)/Increase in Creditors 1 (58) 37
------------ ------------ ------------
Net Cash Inflow from Operating Activities 507 422 1,073
------------ ------------ ------------
2. Analysis of Net Debt
29 September Cash 25 March
2004 Movement 2004
#'000 #'000 #'000
Cash at Bank and in Hand 217 (298) 515
Debt due after more than one year (7,792) (1,192) (6,600)
------------ ------------ ------------
Net Debt (7,575) (1,490) (6,085)
------------ ------------ ------------
Notes
1. The figures in these statements do not constitute statutory accounts; those
for the year ended 25 March 2004 are extracted from the Group Accounts which
have been filed with the Registrar of Companies and which received an
unqualified report from the Auditors and did not contain a statement under
Section 237(2) or (3) of the Companies Act 1985 as amended.
2. The interim dividend of 2.3 p per share will be paid on 16 December 2004 to
those Shareholders on the register at 3 December 2004.
3. This interim report is being posted to all Shareholders and will be
available on application to the Company's registered office at Cleary Court, 21
St. Swithin's Lane, London EC4N 8AD.
This information is provided by RNS
The company news service from the London Stock Exchange
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